Outer Banks Real Estate Update: The “Seaside Report” – 2.14.12

Posted on February 15, 2012 by Gordon Jones

The Seaside Report

The main economic driver on the Outer Banks is real estate. Yet, the OBX does not have an in-depth report analyzing the full spectrum of real estate on the Outer Banks – residential & commercial sales, distressed properties (foreclosures & bank-owned), and current vacation rental trends.

To meet this need for a detailed analysis of the current Outer Banks real estate market, including the often ignored but incredibly important vacation rental market, we have created the monthly “Seaside Report.”

We have combined the forces of both sides of our business – Outer Banks real estate sales with Coldwell Banker Seaside Realty & OBX vacation rentals with Seaside Vacations – to bring you the first report to offer a comprehensive view of the OBX real estate market – real estate sales & vacation rentals.

Please keep in mind that there is a lag time between “real time” and data collection/reporting. As a result, the information will be as close to “real time” as possible, but the data will be based in the past by a couple weeks at least. I will indicate the corresponding date/timeliness for each section of data.

As always, we appreciate your input, and we encourage you to leave your comments below. We are happy to address any questions you may have, and we are always interested in suggestions for improvement.

Outer Banks Real Estate Sales
(Data Source: OBAR)

January 2012 OBX MLS Data:

2012 is off to a great start for Outer Banks real estate. January is typically a slow period for real estate, but the OBX market has been anything but slow in January 2012.

The total number of sales in January was up 17% over January 2011.
Under Contracts were up by 38% from January 2011.
January sales ran the gamut from $20k (land) to $1.6 million (KDH oceanfront).

YTD Sales Residential

Up 13% (94 units vs 83 units)
Land – Up 13% (17 units vs 15 units)
Commercial – up 100% (2 units vs 1 unit)

YTD Under Contract

Residential – Up 32% (144 units vs 109 units)
Land – Up 43% (33 units vs 23 units)
Commercial – Up 500% (6 units vs 1 unit)

Distressed Sales: (Distressed = Bank Owned and Short Sales)
Of the 347 new listings in January, 22 were potential short sales & 42 were bank owned. Sold distressed sales data for the month:

	Total Sold	Bank Owned	Short Sale	% Distressed
January	113	20	16	32%

4th Quarter 2011 OBX MLS Data

Summary – Overall, 2011 ended on a flat note with total sales down by approximately 1% and under contract listings down by 1%. However, there has been a notable decline in the median sale price of single family homes and condos. When comparing the yearly median sale prices there has been a 6 % decline in the price for single family homes and a 10% decline in the price for condominiums. Additionally, when looking at the 5 year trend in median sales prices there has been a 24% decline in single family home prices and a 41% decline in condominiums.

Median Sales Price
	2006	2007	2008	2009	2010	2011
Single Family Homes	$416,833	$383,599	$352,607	$319,500	$334,795	$316,269
Percent Change	-10%	-8%	-8%	-9%	5%	-6%
Condos	$335,642	$278,291	$325,260	$278,252	$218,031	$195,968
Percent Change	8%	-17%	17%	-22%	-22%	-10%

2011 Sales End-of-Year Breakdown

Residential: Down 3% (1315 units vs. 1374 units)
Land: Up 15% (323 units vs. 282 units)
Commercial: Up 92% (25 units vs. 13 units)

Year-End Sale Price Range: The best selling residential properties fell into the $200K to $299K range.

Price Range	$0 – 99K	$100 – 199K	$200 – 299K	$300 – 399K	$400 – 499K	$500 – 599K	$600 – 699K	$800 – 999K	> $1M
Units Sold	81	302	328	219	117	88	88	49	55
Average Days on Market	168	191	208	267	270	264	260	302	308

Inventory: The majority of the current active residential listings fall in the following price ranges:

Price Range	Number of Listings	Price Range	Number of Listings
$1 – $99,999K	73	$600K – $699K	109
$100K – $199K	230	$700K – $799K	51
$200 – $299K	330	$800K – $899K	58
$300K – $399K	324	$900K – $999K	38
$400K – $499K	217	> $1M	121
$500K – $599K	173

Distressed Property (Residential): Distressed = Bank Owned and Short Sales

Distressed property currently makes up 14% of the active inventory in the MLS and the sale of distressed property accounts for 31% of all residential property sales. Overall, the sale of properties listed as short sales rose 27% and the sale of bank owned properties declined 22%; however, total distressed property sales were down by 8% from 2010.

Seaside Report: Distressed Property Market Overview – Q4 2011

	Average	Median	Days On Market
Q4 11	$290,550	$205,000	225
Q3 11	$306,648	$239,950	231
% Change	-5.25%	-14.57%	-2.60%

Market Highlights – Sold Properties

Single Family Homes, January 1 – December 31, 2011

Duck continues to have the lowest percentage of distressed property sales, ending the year with a total of 22%
Hatteras Island has the largest percentage of distressed property sales with 55% of all sold single family homes being either bank owned or short sales
Although the Outer Banks had a slight decrease in single family homes sold for 2011 (1159 vs. 1193) the amount of sales over $1 million dollars increased. There were 46 homes sold for over $1 million this year compared with 39 last year. Of the 46 sold, 9 homes sold for over $2 Million (compared to 4 in 2010)
Distressed sales accounted for 37% of all residential (single family & condos) sales in 2011, which was the same as the previous year.

Outer Banks Vacation Rental Market
(Data Source: NAVIS GeoAnalytics)

Average Booking Window
Legend: 2011; 2012

This graph demonstrates the average number of days between booking and check-in date. This graph is summarized by month of booking, rather than month of stay.

For example, the reservations made at this time of year are about 170 days in advance of their check-in date. The takeaway message is that guests should book early for summer months in order to reserve the most desirable homes and weeks – about 170 days in advance at this time of year.

Seaside Report: Average Booking Window – January 2012

Seaside Report: Average Booking Window – YoY Variance – January 2012

Average Length of Stay
Legend: 2011; 2012

The Length of Stay graph illustrates the average number of days between check-in date and check-out date of reservations, summarized by check-in month.

As would be expected for the Outer Banks, the average stay is seven days + for the summer months and varies in the shoulder season. A strong takeaway here is that full weeks are a must for the summer months, but Spring and Fall offer great opportunities for shorter stays and discounted rates, while maintaining the great benefits of gorgeous weather, empty beaches, and ample attractions and activities.

Seaside Report: Average Length of Stay – January 2012

Seaside Report: Average Length of Stay – YoY Variance – January 2012

Average Stay Value
Legend: 2011; 2012

The Stay Value graph illustrates the average revenue actualized or projected for reservations, summarized by check-in month.

The clear message with this graph is that demand is high and supply is low during the summer months, and as a result, prices are driven higher during the summer months. As mentioned above, Spring and Fall offer great opportunities for shorter stays and discounted rates, while maintaining the great benefits of gorgeous weather, empty beaches, and ample attractions and activities.

Seaside Report: Average Stay Value – January 2012

Seaside Report: Average Stay Value – YoY Variance – January 2011

Bookings
Legend: 2011; 2012

The Bookings graph illustrates the number of reservations actualized or on the books, summarized by check-in month. This graph gives a good view of the “strength” of the reservations over the previous year. Reservations are up, which indicates that early reservations are wise and prices should remain constant. Although, at this point, July is slightly under-performing in comparison to 2011. This will be a trend to keep an eye on.

Seaside Report: Bookings – January 2012

Seaside Report: Bookings – YoY Variance – January 2012

Sales Stir Hope for the Housing Market

Posted on January 23, 2012 by Gordon Jones

December marked the third straight month of previously owned home sales, bringing the supply of homes listed for sale to the lowest level since 2006. We are now seeing a glimmer of hope that the housing market could be starting to climb out of a profound downturn, according to an article posted by The Wall Street Journal.

Existing-home sales increased 5% in December from a month earlier, to a seasonally adjusted annual rate of 4.61 million units, the National Association of Realtors said Friday. Lawrence Yun, the Realtors’ chief economist, called the December gain “a good finish to a very tough year.”

Many economists had predicted that 2011 would be the worst year on record for existing home sales, but the year ended with 4.26 million sales, about 1.6% higher than the 4.19 million existing homes sold in 2010. Market-watchers attributed this to a minor surge in sales at year-end, driven by historically low mortgage rates, falling prices, active investor-buyers and increasing consumer confidence.

Still, economists cautioned that it’s too early to assume that the market is recovering. “These were positive numbers, but that doesn’t mean the market is getting better. Lenders have been trying to get rid of distressed homes, and investors been snapping them up,” said Patrick Newport, chief economist at IHS Global Insight. According to the Realtors report, investors purchased 21% of all homes in December, up from 19% in November.

The inventory of homes for sale declined in December to 2.38 million, the equivalent of a 6.2-month supply, assuming the pace of sales remain at December’s level. A six-month supply of homes typically is considered healthy, although NAR’s numbers don’t take into account the “shadow inventory” of homes that are either in foreclosure or on bank balance sheets and not yet listed for sale.

Read full article here

2011 Coldwell Banker Seaside Realty Awards Ceremony

Posted on January 21, 2012 by Gordon Jones

2011 Coldwell Banker Seaside Realty Awards Breakfast

This week we celebrated the end of 2011 with the 2011 Coldwell Banker Seaside Realty awards breakfast. It was great to have the full team together to look back on the successes from 2011 and look forward to the great opportunities ahead in 2012.

Congratulations to the top producers, and to all of CBSR for a strong 2011 in Outer Banks and Northeast North Carolina real estate sales.

Thanks to Chili Peppers for a fantastic breakfast.

Agents of the Year:

Brad Beacham - Kitty Hawk

President’s Circle award winner

Diane Harris - Elizabeth City

Sterling Society award winner

Listing Agent of the Year:

Johanna Holcomb - Kitty Hawk
Diane Harris - Elizabeth City

Here’s a quick video of the highlights:

Optimism Builds in the Housing Market

Posted on January 18, 2012 by Gordon Jones

“Several recent indicators for the real estate industry are pointing to a market that is on the mend and entering recovery mode.

Housing experts’ predictions for the new year tend to center around a market stabilizing before entering a gradual, albeit very slow, recovery. However, the tone is more upbeat than it has been in years for the housing market.”

Via REALTORMag.com..

Here are a few of the signs that are showing the market moving in a more positive direction:

Home sales: Existing home sales are expected to increase 12 percent this year, following a 2 percent jump last year, Moody’s Analytics predicts. The signs are already showing: In November, pending home sales — a gauge for future home buying — reached its highest level in 19 months, the National Association of REALTORS® reported. (Read more.)

New-home market: Coming off of what could be considered the worst year for new-home building ever recorded, the sector is expected to bounce back this year. New-home sales and starts were already showing a rebound in the last few months of 2011. Moody’s is predicting that single-family housing starts will increase 37 percent this year, and new-home sales will soar 74 percent.

Housing stocks: Investors are starting to get optimistic about the possibility of a rebound too, and are turning to home builder stocks. These equities have recently outperformed the broader stock market and the S&P 1500 homebuilding index has increased 38 percent since mid-October, USA Today reports.

Consumer confidence: With mortgage rates at record lows and housing affordability high, about 71 percent of Americans say now is a good time to purchase a home. Also, more Americans are optimistic that home prices will rise over the next year — about 26 percent say prices will rise in 2012, an increase of 4 percent over the last survey, according to Fannie Mae’s December National Housing Survey.

Top 5 Reasons to Buy a Home in 2012

Posted on January 16, 2012 by Gordon Jones

Make the American Dream of home ownership a reality in 2012. Here are the Top 5 Reasons to purchase a home in 2012 via QuickenLoans.com…

Appreciation – Buying a home now (at the current rates) can almost ensure your home’s appreciation in the future. Mortgage rates are near historic lows and home prices in many parts of the country are down. This is the perfect recipe for home appreciation. Additionally, many foreclosed homes are available for a fraction of the original cost. This can translate to a higher profit if you decide to sell once the market rebounds.

Property Tax Deductions – For income tax purposes, real estate property taxes for a vacation home and first home are fully deductible. The IRS (Publication 530) provides detailed tax information for first-time buyers that may answer many questions about what deductions homeowners are eligible for.

Preferential Tax Treatment – If you own your home for more than a year and receive more profit than the allowable exclusion after the sale of your home, the profit will be considered a capital asset. Capital assets are given preferential tax treatment.

Equity Building – Many factors such as credit qualification, loan flexibility, and annual percentage rate (APR) contribute to the final decision of what type of mortgage loan best fits your goals. Yet, a new trend being used by some homeowners is to actually add money to their monthly payment to decrease the principal balance of their loans at a much faster pace. This trend is called equity building. Equity builders usually select a home loan with a lower interest rate (and a shorter term loan such as a 15-year fixed) to help build equity faster. This rapid payment process allows borrowers to:

Pay off the principal balance faster
Lock in near-record-low interest rates
Shorten the length of their home loan
Own their home faster
Pay substantially less mortgage interest

Equity building is a beneficial trend that’s becoming more and more popular with fiscally responsible homeowners. Also, home equity is the largest single source of household wealth for most Americans.

Pride – Homeownership offers many benefits to many different types of people. For some homeowners, playing your music as loud as you want and painting the walls the color of your choice is a perk. For me, homeownership will permit me to build an NBA regulation size basketball court on my own property. For my coworker Joel Jarvi, home ownership may allow him to build the indoor slide of his dreams. No matter who you are, homeownership is a purchase, commitment, and journey that’s sure to bring you pride.

Furthermore, when the uncertainty surrounding the housing market fades and the market rebounds, homeownership may in fact transform that pride to profit through a home sale.

New Year New Home?

Posted on January 3, 2012 by Gordon Jones

Via ColdwellBanker.com

It’s officially 2012 so let me start by wishing you a happy new year. In early January, many of us are planning and setting goals for everything we want to do and achieve in the year to come. While many people think of spring as the primetime home buying season, the winter months often offer an even greater selection, and the opportunity to settle into the new home before warmer months arrive. If buying a house is on your “to do” list this year, now is also the time to begin preparing.

I remember when I bought my home. There were so many things to get in order– it was confusing to decide where to begin! So, even if you plan to buy in the spring, January is a good time to get ready. Here are some tips to help you get on track to reach your 2012 home buying resolution:

Select a qualified and trusted real estate agent: At Coldwell Banker, we have a network of knowledgeable, trustworthy agents. Agents understand the local market and can help you find all the information and resources you need to get started. Researching on your own is important, and using free online tools is a great way to start, but meeting with an agent will ensure you don’t miss any important steps along the way. In fact, the next three tips were sourced from the great advice of our agents.

Create your “must-haves” and “nice-to-haves” list: Easier said than done, right? But it’s next to impossible to find a first home with everything. You’ll need to think about your lifestyle needs and prioritize the non-negotiable home accommodations, such as a bedroom for each family member, over items you may want, but not need, such as a large master suite. Everyone’s list is different, but knowing your “must-haves” in advance will help you stay focused.

Determine your budget: Be realistic about what is affordable. An agent can help you find comparable home prices and hone in on approximately how much the payments will be. You should also plan to get pre-approved for a mortgage. Doing this prior to house hunting will let you know how much money you qualify for, and how much you can afford. You’ll also be able to figure out which mortgage type is best for you.

Identify the perfect “location, location, location”: Everyone has heard this phrase before, and while the surrounding neighborhood and home itself may improve over time, the physical location will remain the same. Determine in advance how close you would like to live to work, schools or extended family. A short commute to work, proximity to family or having easy access to highways and mass transit will often be items for your “must-haves” list.

Hope your 2012 is off to a good start. If you’re starting your home search in 2012, we’d love to hear what you’re doing to get the home search process started.

Some Good Signs for the Real Estate Market

Posted on December 29, 2011 by Gordon Jones

“Sales ticked up for existing homes and new homes, several real estate market indicators revealed last week, pointing to a housing market that may finally be entering recovery mode.”

Via RealtorMag…

In the most recent report, the Census Bureau reported that the new-home market continued its rebound, with sales of new houses once again inching up last month. New-home sales rose 1.6 percent from October to November to an annualized rate of 315,000, and sales were up nearly 10 percent compared to November 2010.

The median sales price of a new home in November was $214,100, the Census Bureau reported, and the inventory of new houses nationwide decreased to a six-month supply at the current sales pace.

“Inventories of new homes are very low: There’s nothing on the shelf, so any increase in new home sales will translate directly into new housing starts,” Bob Denk, senior economist at the National Association of Home Builders, told CNNMoney. “That means putting people back to work.”

Other recent good news for the housing market: November sales of existing homes increased 12 percent year-over-year, new-home building starts were up nearly 21 percent year-over-year, andmortgage rates reached new record lows last week, pushing housing affordability even higher.

Source: “New Home Sales Edge Up,” CNNMoney (Dec. 23, 2011)

Business Development Manager Needed on the Outer Banks

Posted on December 29, 2011 by Gordon Jones

Seaside Vacations - www.OuterBanksVacations.com

Seaside Vacations has spent the last 20 years bringing friends and families together to experience meaningful and relaxing vacations on the Outer Banks. We are currently seeking candidates for a position in Business Development who likes to work hard, meet great people, build relationships, and have some fun while doing it!

The Business Development Manager’s principle responsibility is to develop relationships with vacation rental home owners and bring quality homes into our vacation rental program through prospecting; to consult with owners on ways to increase their occupancy; and to develop and maintain referral relationships with REALTORS®, builders, vendors, and home owners.

Support duties include developing informational materials with the Marketing Department, managing our contact management system, developing an enrollment campaign, producing rental projections and lead generation sources.

Job Requirements
The candidate should possess a previous track record in sales with an understanding of the vacation rental environment. A current North Carolina Real Estate broker’s license is a legal requirement of this position. Self-motivation, strong organizational, written, verbal and presentation skills are a must. The work schedule will be flexible, and will include evenings and weekends. A desire to develop and maintain professional relationships is key. Must pass a criminal background and drug test.

Responsibilities include, but will not be limited to, the following:

Develop knowledge base to generate rental projections for new prospects as well as the Sales Department.
Develop a referral network from outside sales agents, contractors, insurance agents, mortgage brokers, etc.
Meet with prospects in person and by phone.
Monitor and respond to building permits and sales transfers.
Develop a complete familiarity with Seaside Vacations’ contract documents, business practices, policies and procedures, and competitive environment.
Develop direct mail campaigns with detailed follow-up.
Develop sales presentation for one-on-one selling encounters.
Develop GoTo meeting presentation for remote selling encounter.
Network with sales agents to retain and recruit new homeowners involved in the sales process.

Compensation
Base salary plus commission/bonus

Interested candidates should send a letter of interest and resume to calmoney@seasiderealty.com

The PRICE is the Same, but the COST is Less (infographic)

Posted on November 17, 2011 by Gordon Jones

The KCM Blog...That means you save $285.30 a month, $3,423.60 a year and $102,708 over the life of a 30 year mortgage! You buy the home for the same PRICE but the COST is over $100,000 less.

Via the KCM Blog…

There is more and more research coming out showing that it makes great financial sense to purchase a home today . Whether it be rent vs. buy ratios, income-to-price ratios or income-to-mortgage payment ratios, purchasing a home right now is a bargain compared to historic norms. Now we want to look at the COST of a home today compared to pre-peak prices.

According to the most recent S&P Case Shiller price index, residential real estate values have returned to 2003 1Q PRICEs. That, in itself, says something. However, when you factor in mortgage rates, the case for buying a home today becomes even more compelling.

Bottom Line

This is why so many financial advisors are saying that this may be one of the greatest times in history to purchase a home.

Contact a Coldwell Banker Seaside Realty agent today for more information about homeownership and what works for you.

Modest Volume, Price Gains Seen Next Year

Posted on November 15, 2011 by Gordon Jones

According to REALTORMag, the housing recovery will continue on its slow but steady pace over the next couple of years. However, one thing that may stand in the way is a loss of confidence in a housing recovery.

NAR Chief Economist Lawrence Yun

NAR Chief Economist Lawrence Yun predicted home sales would increase by 4 percent next year and home prices would inch up 2 percent during the Economic Issues & Residential Real Estate Business Trends forum Friday morning. In 2013, he projected sales to pick up another 6 percent and prices to rise another 3 percent.

Home-sales growth has been flat this year, even though it couldn’t be a better time for consumers to buy, because prices are still down—essentially under replacement value—and interest rate are at historical lows. Even employment and wages have been heading up, although both at a modest pace.

Yun characterized today’s market as “strange” because of this disconnect between the good buying conditions and the low sales growth.

Rock-bottom consumer confidence is a big part of the weak market but the hurdles to borrowers imposed by lenders through stringent underwriting requirements are a major issue, too. Lenders are requiring applicants to have credit scores of about 760 for Fannie Mae and Freddie Mac loans, and just under 700 for FHA loans, shrinking potential home sales by about 20 percent.

The stiff requirements come at a time when banks are seeing strong profits and run counter to the Federal Reserve’s efforts to use rock-bottom interest rates to attract borrowers and get the economy moving.

Behind the tough underwriting is a concern among banks about borrowers’ ability to repay loans, but Yun says that risk is low. Rather than continuing to head down, home prices have been stable for the last two years and are poised to head up, which will reduce lending risks, lower foreclosures, boost sales, and further strengthen the market.

To show that home prices have been stable, he cited both NAR and Case-Shiller data, which show prices have been hovering around a $140,000 national median since 2009.

Yun said it was crucial that the federal government not stymie what little momentum the housing market is seeing by moving forward with a proposal to require 20 percent down payments from home buyers or making other destabilizing housing policy shifts. It’s also crucial for interest rates to stay low, although if lenders return their underwriting to the sound standards they used before the housing boom, he said, the market could handle higher interest rates.

Richard Peach, senior vice president at the Federal Reserve Board of New York and the other speaker at the session, offered a unique suggestion to improve the housing sector, one that was particularly suitable for Veteran’s Day: help military personnel who served overseas purchase foreclosed homes.

“My idea is to allocate certificates to 2.5 million service members who served in Afghanistan and Iraq that could be used as a downpayment on a foreclosed home in the Fannie or Freddie portfolio,” Peach said.

Outer Banks Market Report

News about real estate values in the Outer Banks area

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